The old dump, about 1.7km north of Kaka Point, closed in the 1980s, but had since been uncovered by steady coastal erosion.
The Clutha District Council said old farm implements and metal had been unearthed and deposited on the foreshore, causing an ''unsightly nuisance,'' and tests showed elevated levels of contaminants in the soil.
Council district assets manager Jules Witt said that while the site was not operated by the council or its predecessors, the majority of it was on council road reserve, and the council ''reluctantly assumed responsibility'' for resolving the site's issues.
Mr Witt said the council had resource consent from the Otago Regional Council for the work, which includes excavation, removal of waste from the most vulnerable area, and protection of the site by ''rock armouring'' a length of foreshore about 170m long.
''We aren't clearing a huge amount of the refuse; rather we are constructing a sloped, armoured wall to protect the old dump from further erosion,'' Mr Witt said.
He said the council approved $330,000 for the work including professional fees and consents, and the contract price came in at about $207,000.
Andrew Haulage began working on the site last week.
Mr Witt said the contract period was for six weeks but that was dependent on being able to work during favourable weather and sea conditions.
The full excavation option was estimated to cost about $1 million but the council failed to secure funding from the Government's contaminated site remediation fund.
Part of the former dump site is a rest area and Mr Witt said the council did not plan to keep the rest area because a better-developed site was nearby.
